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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (72279)	6/4/2009 4:55:42 AM
From: Sully-	Read Replies (1) \| Respond to of 90947

Re: The Biggest Debt Since WWII Jonah Goldberg The Corner That Niall Ferguson excerpt Andrew provides below gets at something I haven't seen discussed enough. Despite all the noise about the New Deal ending the Great Depression (it didn't, and very few economists, including Krugman, claim otherwise), the real debate has always been whether it ameliorated it somewhat or prolonged it. The consensus, however, is that the Great Depression didn't end until World War II. And real growth and prosperity didn't arrive until after the war when America's largely intact — and ramped up — industrial base was turned toward selling Europeans and returning American soldiers huge consumer goods like cars and dishwashers and the rest. If memory serves, the Dow rose something like 230% in the 1950s alone. American trade benefitted enormously from the fact that America's competitors lay in ruins. We could pay down our debts then because of the America-led postwar economic boom (and because our government was less expensive). Let's assume that Bernanke and Obama succeeded in staving off the Second Great Depression. Hooray and Huzzah. But does anyone think we will have a similar economic boom, that enriches America enough to pay for all this additional debt? Europe, China, India, and Japan aren't laying in ruin. I'm a big believer in the curative powers of economic growth and I don't believe that economics is zero-sum. But where will that growth come from? Will it be enough to pay down our debts and obligations? I just don't see how, particularly if we get a VAT and higher income taxes to pay for health care. Nor do I have any confidence in Obama and his party to make anything like the cuts necessary to pay for all of this (in fairness, my confidence in Republicans on this score is only marginally better, assuming they ever get in power again). I truly hope I'm missing something. But even normal robust growth, if or when it comes, doesn't seem remotely up to the task. It seems to me that all of the new New Deal talk fails to grasp that the extent to which nostalgia drives our assumptions of "what works." Even if you give the most charitable reading of the New Deal and the postwar period, the simple fact remains that those times aren't like these times. corner.nationalreview.com